COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania November 30, 1998 9:50 a.m. - - - Bill No. 980784 - Amending Zoning Maps... Bill No. 980785 - Re use for Civic Center Land... Bill No. 980788 - Amending Title "Finances, Taxes and Collections," by adding Chapter 19-3200 10 "Keystone Opportunity Zone"... Bill No. 980796 - Re Police Residency Requirements... 11 Bill No. 980789 - Re Provision of Alternative Funding Mechanism... 12 Bill No. 980843 - Re Recodification of City's Retirement System... 13 (Full Text of Bills Attached.) 14 15 PRESENT: COUNCIL PRESIDENT JOHN F. STREET COUNCILWOMAN AUGUSTA A. CLARK 16 COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DAVID COHEN 17 COUNCILWOMAN ANNA CIBOTTA VERNA COUNCILMAN JAMES F. KENNEY 18 COUNCILMAN MICHAEL A. MUTTER COUNCILWOMAN MARIAN B. TASCO 19 COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK DICICCO COUNCILMAN RICHARD T. MARIANO COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 PUBLIC MEETING - COMMITTEE OF THE WHOLE INDEX BILL NO. 980784 William Hankowsky, President............. Philadelphia Industrial Development 6 Corporation John Frye, Executive Vice-president...... 36 from the University of Pennsylvania Jeffrey Revist, Executive Vice-President.. 40 of the Children's Hospital of Philadelphia Charley Pizzi, President of the.......... 46 Greater Philadelphia Chamber of Commerce Rich Lombardo............................. 49 Philadelphia Planning Commission Ken A. Sipos, Department Real Estate..... 53 Specialist II, Department of Public Property BILL NO. 980788 Stephen P. Mullin, City Representative.... 55 and Director of Commerce for the City of Philadelphia BILL NO. 980787 Nancy Kammerdiner, Revenue Commissioner... 161 for the City of Philadelphia Frank Piava, Divisional Deputy............ 168 City Solicitor for the Tax Unit BILL NO. 980796 Ricky Lynn Southerland, Petty Officer..... 180 Third Class Fred Voigt, Executive Director............ 190 of the Committee of Seventy 3 PUBLIC MEETING - COMMITTEE OF THE WHOLE (Index, cont'd.) Stephen Preston, Legal Director........... 231 Commissioner John F. Timoney.............. 246 Karen Simmons, Legal Assistant............ 296 to Commissioner Timoney Mr. Rocks, member of the F.O.P............ 308 Linda Sadel, Personnel Representative..... 315 of the City of Philadelphia James Jordon, Integrity and............... 337 Accountability Officer Will Gonzalez, Executive Director......... 345 of the Police- Barrio Relations Project BILL NO. 980789 Ben Hayllar, Director of Finance.......... 354 Kenneth Kent, Actuary for the............. 380 Pension Fund Sandra Parker Chief Investment Officer.... 386 for the Pension Fund Joe Miguel, from PICA..................... 418 Thomas Queenan, City Treasurer............ 431 BILL NO. 980843 Ben Hayllar, Director of Finance.......... 433 Deborah Butler............................ 441 Chief Deputy city Solicitor Carol Stooks.............................. 453 Representative of District Council 47 4 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 P R O C E E D I N G S
I have to step out for a bit, and Councilwoman Verna will sit in the chair. It is now ten to 10:00, and we would like to start the hearing considering Bills No. 980784 and 980785. Mr. Hankowsky, being a veteran witness in this chamber, has commented pertinent -- placed himself at the witness table and placed his charts up. Smart thing to do. If we could get a quorum in the chamber, we would appreciate it very much. If we could get a quorum in the chamber, we would appreciate it very much. We now have six members. We can get a quorum in the chamber. I promise you everybody will know what's in the bills. Attention, we'd appreciate if we one additional councilmember will come to the chambers; we will then have a quorum. We need one councilmember in the chamber. I have a feeling that Councilman Longstreth will enter the room very, very shortly. Councilman Longstreth you are embarrassing me. Where are you? 5 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 I'd appreciate it if councilmembers would come to the chamber. Even if a member is in a meeting, if you come and give us a quorum, you may be excused until you are needed. Councilman Nutter is in the eight. If we can have one additional councilmember in the chamber, we can get started. Councilman Longstreth has arrived. I now have a quorum. The first bill for consideration today will be Bill No. 980784. This is a bill to amend the zoning maps by changing the zoning designations of certain areas of land located in the 27th Ward and within an area bounded by Civic Center Boulevard, Convention Avenue, South Street, the Schuylkill Expressway, North Drive and University Avenue. And then we have Bill No. 980785, which is a bill declaring it to be the finding of City Council that for many years the City of Philadelphia and the Civic Center Board of Directors have not been able, in good faith, to use certain parcels of land occupied by the Civic Center. These two bills will be first heard. I 6 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 understand that Mr. Hankowsky will give the primary testimony on the bills. There are a number of people who will testify. Will Councilwoman Verna please approach the chair? As I have previously explained, I will be out of the chamber for about to 30 minutes and 9 will return. I do not want anyone to think I am not 10 interested in these bills or any other bills, but 11 this is something over which I have no control. 12 Thank you. 13 (Councilwoman Verna takes the chair.) 14
Good morning, Mr. 15 Hankowsky. Please identify yourself for the record 16 and proceed with your testimony. 17
Good morning, Madam 18 Chairwoman and Members of City Council's Committee 19 of the Whole. My name is William Hankowsky. I am 20 president of the Philadelphia Industrial Development Corporation, and I am here to testify today in support of Bills No. 980784 and 980785. Also available this morning are senior officials of both the University of Pennsylvania and Children's Hospital of Philadelphia, who are here to 7 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 answer any questions with regard to these bills before you. Before I start my testimony, let me point out that at each councilperson's place is a folder that includes my testimony, which would have been previously submitted, a facts sheet on this transaction, a small 8 and a half by 11 site plan, and then amendments to Bill No. 980785. And I should note, those amendments simply change the legal descriptions of certain easements in the project. There is no substantial change that results from those amendments. Bill No. 980784 authorizes a change in the zoning of the acre Civic Center Site on Civic 16 Center Boulevard in West Philadelphia from R-15 to 17 C-3. And Bill No. 9 acres of that site to the Philadelphia 19 Authority for Industrial Development, PAID. 5 acres will be transferred to the University of Pennsylvania and Children's Hospital together with three access easements. The City will retain ownership and control of what most of us know as the Museum Building, Convention Hall and Pennsylvania Hall. 8 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 Further, Bill No. 5 acre 4 parcel to the University of Pennsylvania and 5 approximately 2 and a half acres to Children's 6 Hospital. The site plan attached to your fax sheet and displayed at the easel in front of us this morning graphically illustrates the size and location of these respective parcels. 5 acres of this site. And PAID will receive approximately $3 million in cash consideration for Children's Hospital for their parcel. 2 acre parcel of the Civic Center to PAID had been added to the hearing agenda. In order to basically describe this entire transaction, this resolution was passed by City Council in its session on October 29th, 1998 and authorized the transfer of that site, which is 9 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 at the extreme end of the property to the University of Pennsylvania and Children's Hospital for the development of an 1800-car garage, which will replace the parking lost as a result of the development of the rest of the site. I think most of us all remember there is an underground garage here; that will be part of the demolition. Since the timing of the construction of this garage is critical for the overall project to occur, we have already begun to develop the definitive agreements necessary for transfer of that parcel and are working with the University of Pennsylvania and Children's Hospital to take the necessary next steps on that project. These institutions will pay approximately $5 million as consideration for this parcel. Construction of the new garage is expected to start in March of next year with the garage opening in June of the year 2000. Let me now turn back to Bill No. 23 980785. This property is currently at the location of the main exhibition hall of the former Civic Center. As you know, this facility was officially 10 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 closed in 1995 upon the opening of the new Convention Center in Center City and has been used infrequently by the City since then; for example, for the event Dinofest (ph). The opening of the new Convention Center has made this facility obsolete, thereby freeing this site for other appropriate development that will benefit the City. 3 million square feet of medical research patient treatment and office space in support of their expanding medical activities in the city. And, Craig, if you wouldn't mind, I just want to point out on the aerial that's in front of us where this will occur.
2 acre site where the garage will be constructed. That was the subject of the resolution Council acted on on the 29th of October. Pennsylvania Hall is the next building that remains and is not part of this transaction. The large exhibition hall, the 8 and a half acre site, is outlined in yellow is then 11 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 subdivided into two parcels approximately, 6 acres for the University of Pennsylvania and approximately 2 and a half acres for Children's Hospital. And then again, Convention Hall and the Museum Building also remain and are not part of this transaction. And, Craig, maybe we should go to the next one? And it just simply shows that on a site plan, which is in your packet. As you can see, this development will essentially represent a continuation of the very successful Philadelphia Heath Care Science Project that was undertaken by these two institutions and others across Civic Center Boulevard on the old Philadelphia General Hospital Property and the tremendous benefits that have resulted to the City in that project. On the PGH Development, the two institutions combined have invested more than $400 million to date, have added over 5,000 new high-paying jobs to the City's employment base. The proposed development on the Civic Center Site will be very comparable to what happened on the PGH Site in its scope and impact including an 12 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 estimated $450 million of planned additional development and approximately 2250 permanent new jobs; again, just on the parcels we are talking about this morning. Furthermore, this project will generate approximately 1500 construction jobs. I should further note that the City is not required to provide any financial support to this project, so it will have no budget impact. The on-site streets that will service this project will be built by the institutions as part of the overall development. In addition, the City and PIDC will apply for approximately $2 million in State and Federal grants for the relocation of certain water and sewer utility lines that traverse the site and service the West Philadelphia area in general. The two institutions have worked very cooperatively with the City PIDC on the Philadelphia Health Science Development, and we fully expect this good working relationship to continue on this project. To date PIDC, the University of Pennsylvania and Children's Hospital have together already invested a significant amount of time and 13 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 effort as well as over 250,000 toward developing a comprehensive master plan for this site to ensure that issues such as adequate zoning, parking, traffic and access are dealt with in a way that will facilitate the successful development of the whole property both now and in the future. Let me point out that what I mean by this is that we ensure that both Pennsylvania Hall and the Convention Hall and the Museum Building are all future development sites and are part of an overall master plan so we are not -- so that we can gain the entire benefit of this entire site being developed over time. The zoning designation of C-3 is identical to what City Council approved in December in 1997 across Civic Center Boulevard for Children's Hospital. And any authorization for subsequent development of the Civic Center Museum Site, Convention Hall Site or Pennsylvania Hall Site will be subject to City Council approval. So we must come back if we dispose of any of those remaining three parcels. As part of the definitive agreement to 14 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 soon be negotiated between the parties, PIDC will include a requirement to amend the NBE/WBE Plan to be developed to ensure appropriate levels of minority and female representation be reflected in the design and construction of these new buildings.
Both University of Pennsylvania and Children's Hospital have an excellent track record in that regard and have agreed to provide those progressions in these developments as well. And as I said, earlier representatives of both institutions can elaborate on this point as well as any other questions you might have this morning. Predicated on City Council's favorable consideration, the current schedule calls for the following: environmental cleanup work to commence in January of 1999 with demolition and construction to begin as soon as possible thereafter. We are hoping to have orphans' court approval by July of next year. And as mentioned previously, the first phase of the development will include the construction of the 1800-car parking garage by the University of Pennsylvania and Children's Hospital on the 2 acre parcel already authorized by City Council. 15 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 This will replace the approximately 1400 parking spaces currently under the existing Civic Center that are scheduled for demolition, which is projected to begin on March 15th of 1999. And, again, that garage should be available for occupancy in June of 2000. Finally, as I mentioned when I described the packet in front of you, I would like to amended the legal descriptions for the three access easements that will be transferred so that they reflect the site survey of the property that was completed subsequent to the introduction of these bills in City Council. We would respectfully ask that the Committee consider these bills favorably, report them out with the suspension of the rules of council at the next regularly-scheduled meeting of City Council. Thank you for this opportunity to testify. I would be happy to answer any questions with regard to this ordinance as would representatives of both institutions. Thank you.
Thank you. Mr. Hankowsky, why do we need orphans' court approval? 16 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
The Civic Center Property -- and I should make the point here that the site I described for the garage, the 2.2 acre site, is excluded from this issue. It is not -- it can proceed without orphans' court. But the remainder of the property was provided to the City in trust for what occurred over time, which was the development of the Museum Building and Convention Hall. Therefore, in order to transfer the property, in addition to City Council's consent, we will also need orphans' court approval. And we, therefore, would proceed to orphans' court immediately upon, hopefully, favorable consideration by City Council.
I know you indicated that there would be approximately 1500 construction jobs. How many permanent jobs did you indicate that this would create?
This will create in this phase, between the garages, the buildings at Penn, and Children's Hospital, will develop 2250 permanent new jobs.
Can you tell us 17 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 what the anticipated increase in wage tax as a result of this construction will be?
We anticipate, given the high salary level that these kinds of jobs are, research and medical, that you would have approximately a $4 million increase in wage tax once the project is up and operating.
Thank you, Madam Chair. When the issue of the Convention Center was before City Council a number of years ago, there were many questions raised about what would happen to the Civic Center. And at that time, my memory tells me there were very strong assertions by you and others on behalf of the City that both were needed, that the Civic Center dealt with needs that the Convention Center would not be dealing with and vice versa, and that there was no danger of the Civic Center proving unnecessary. Could you comment with respect to what has caused a change?
Yes. Perhaps the most 18 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 fundamental change was, at the time we dealt with the Convention Center, we did not have the prospect on the horizon that we would develop a second arena in South Philadelphia. And as you might recall, since your memory is extremely good, Councilman, when we talked about the development of what is now the First Union Center but at the time we called it Spectrum II, we did present the City Council an analysis that showed there was a high probability that whatever was remaining in terms of activity at the Civic Center that would probably migrate into the old Spectrum. And, in fact, in the analysis we presented to City Council of their cost and benefits of doing the new arena, we actually charged ourselves, so to speak, with the cost of losing all activity at the Civic Center as one of things that would occur. And, in fact, that's what happened. If you recall, we used to at Convention Hall have sort of a second-tier Ice Capades or second-tier wrestling activities. All of that now occurs in the old Spectrum. So, in fact, between the Convention Center handling conventions, trade shows and other 19 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 meetings, and the two arenas handling all of what I will call public events, there is almost now no 4 activity occurring at this facility.
My memory is very good as to what was said with respect to the continued need for the Civic Center when we talked about the Convention Center. But I must admit, I don't remember at all any testimony at any time with respect to any project indicating that the Civic Center was no longer needed, that its business was being transferred to the Spectrum, or the First Union Center now. Could you tell us about when that matter came up?
Yeah. As you recall, we so much enjoyed doing the arena project, we actually did it twice in this chamber. We did it at the end of Mayor Goode's administration the first time -- I believe that was 1991 -- and then we needed to come back, and modified that agreement, I believe in 1993. And, in fact, I would be happy to share with you, Councilman, the testimony and the analysis that showed, in fact, that we projected that the 20 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 Civic Center Property would be out of activity as a function of building the new arena.
How long after the Convention Center discussion was that, if you recollect?
Well, we did the Convention Center Legislation, the Use and Service Agreement in '89, if I recall. '88? '88? '87?
And you are saying within two or three years thereafter?
The City changed its position, found that circumstances were different?
Thank you, Madam Chair. In the same line of questioning that Councilman Cohen was pursuing, when I first became a member of the Civic Center Board in 21 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 1992, I believed at that time that that building could be used for smaller-type events and even as a convention and meeting incubator for smaller organizations that could not afford to go into this Convention Center but still wanted to meet in Philadelphia and perhaps grow that convention business into something that would be accommodated in the Convention Center. As a result of a lot of hard work and efforts, the problem was that people chose not to go to the Civic Center. It was their choice. We had looked at different events, different shows, things that we were trying to attract into the city that would not necessarily be in competition with the Convention Center but could grow from there into a large Convention Center activity; the interest simply wasn't there. And then, as you said, with the First Union Center, at the time The Cores State Center, coming on-line, freeing up space for the Spectrum, and in addition to that, recently the Apollo coming on-line, people are simply making market-driven choices not to use the Civic Center, even when they were directed that way. 22 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 So as a member of the board of the Civic Center, I was simply sad to see it not be used. But no one wants to use it. And that's what the bottom line has become. And, again, this project, in the face of the taxes and the jobs, both construction and permanent, I think it's probably the highest and best use for that site.
I think, Councilman, as you also might recall, I think we had originally hoped that, for example, the Auto Show and Boat Show would stay in this building and would get national shows. And, in fact, those organizations that put us in the Convention Center were not coming to Philadelphia, so we lost even the anchor uses we had, the old gate shows that used to be here.
Thank you, Madam Chair. Mr. Hankowsky, how much business has been 23 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 turned away? I understand there have been organizations, groups that have approached the management of the Civic Center and asked about its availability and have been told that it's not available.
Boy, I -- I am not aware that there is any significant number of people that quote/unquote have been turned away. I think, as we just discussed, one of the issues the City has faced is in what condition to keep these facilities. And so I think about a couple of years ago, the City made a decision to even cut back -- I think it was, I guess, '95, actually, when the decision was made to cut back the operation and fundamentally keep just the garage open. And so except for -- the example was Dinofest, which was just a one-of-a-kind -- you know, they just needed a big space to be in for a protracted period of time, that everyone else is either referred to either the Convention Center -- and as you know, the Convention Center does a significant amount of local business. 24 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 I think maybe nearly 1,000 events -- almost 1,000 events a year of local activity, groups that are looking -- you know, that are in our area, in the city, or they go -- as you recall, we also now have, as I mentioned, both arenas. And we have even used the arenas for local events, so that the Chamber of Small Business Fair has been at the arena, it has been at the Convention Center. So I am not aware of anybody significantly asking for that building.
Is it safe to say that there has been no active marketing or sales efforts to --
So if, in fact, there were an effort to sell it, to make it available, there is that potential that there could be business there? There has been no 25 active effort? 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
Well, I guess I would tend to agree with Councilman Kenney, that the experience is that when we try to tell people to use that building, they said they didn't want to use that building, that they wanted to be in the Convention Center; they wanted to be in the new building. So I would not agree that there would be particularly -- and as I think back at the time, the City was looking at, quote/unquote, subsidizing the operation of two buildings, it was a negative. I mean, we weren't making money on the building. It cost us money to have the building there. And as you know, we do support the Convention Center's operation in the same way and that, in effect, the City was having to, quote, pay twice: once to keep the Convention Center there, and once to keep the Civic Center there. So if the actions that Council has taken from a budget perspective in terms of the appropriations that are available for that facility -- basically the appropriation now is simply enough to keep the garage open. 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
Thank you, Madam Chair. But I can see on the other side that Councilwoman Blackwell has her light on, and I know that this location is in her district, so I will defer to her.
Thank you, Madam Chair. Thank you, Councilman Nutter. I believe that after many meetings and much discussion about this project that certainly there are many of us who love the area and love the old building. But I must say that the proposed use can do so much to change medicine. And we already have a wonderful hospital, treatment area, complex in West Philadelphia, and that covers not only this 27 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 region but this country. And what this would do is not only put us far ahead, but save some lives. The difference that it could make certainly in the lives of people throughout the world far outweighs all of the other considerations of us losing this building as it now is, and all of the other work that has to be done certainly to get us here, from here to there. So I will certainly ask my colleagues to consider the proposed use and the difference it will make to humanity. Thank you, Madam Chair.
Thank you. Councilman Nutter, do you want to be recognized now?
Briefly, Madam Chair. Thank you. Mr. Hankowsky, two quick questions: One, is there anyone from a public employee standpoint working at this particular site right now?
I think the answer is no. The garage is on a -- I believe it's a 28 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 month-to-month contract with a -- you know, with a parking management firm, so they operate the garage. I believe there is a minimal security presence. But I believe that might even be --
Private. So there is no one -- there is no -- the employees that were there and the impact on them was dealt with, I believe, in 1995 when as part of the budget process we took out the appropriation to operate the building. Those employees were absorbed in other vacancies within the Government. No one was laid off.
So your testimony today is that this transaction at this point has no impact on any public employees?
Secondly, on your facts sheet on , the values for the parcels, I understand that the value on Parcel 2 is at $1 because you are giving consideration to the University for the cleanup and demolition on $15.4 million; is that correct? 29 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
How did you come to the value on Parcel 1 and Parcel 3?
We did appraisals of the property -- excuse me. We did appraisals of the properties, and it's done on a per-square- foot value. So if you do the math, it comes out on a per-square-foot value. And the cost that Penn is paying for, the demolition and environmental cleanup, exceeds the per-square-foot cost that they would pay if it were a cleared site. And the costs for the demolition have been provided by contractors so that we've gone from original estimates to now actually the contractor proposals.
Given the unique nature of this particular site, how are you able to come up with comparables for square footage evaluation?
We compared them, in fact, in part to sales across the street -- 30 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 which, of course we were involved with. "We" meaning the public in general.
(Continued) -- and other sales in West Philadelphia. That is, if you kind of look across the city on a per-square-foot basis or per-acre basis, as you can see by these numbers, fairly substantial prices compared to most other parts of the city.
I understand. What are the per-square-foot and per-acre numbers?
It's around $40 to $50 per square foot, and so it's about a million, a million and a half per acre, I think, which -- I mean, just to give you a comparable, the most valuable entity airport to build a hotel on is going at about $600,000 an acre. So these are pretty substantial, robust numbers. 31 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
They do want them, yes. And I think to pick up on Councilwoman Blackwell's comments, in a time when we have all faced the prospect of our health industry being in trouble, to have two of our very strong anchor institutions, Children's Hospital and University of Pennsylvania Hospital, looking to expand and become, you know, both regional and national centers of excellence. I think the benefit is terrific. And to get money for it I think is just icing.
I understand. And I am not disputing any of those points. Lastly, what involvement do we have through this transaction? Let me strike that question for a second. What is our financial involvement in this transaction?
The City's financial involvement is, one, that we have agreed that we will apply for funding that may be available from either the Commonwealth of Pennsylvania or the Federal Economic Development Administration to 32 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 deal with certain utility questions related to it. If those applications are unsuccessful, we are not committed to backstop those applications. You will see in the City Capital Budget a line item which deals with one sewer line that traverses the site -- it really doesn't serve it; it serves West Philadelphia. And in consultation with the Water Department, they said that they will probably end up sometime in the next several years having to fix it anyhow. So there is a request for $1 million that deals with this one utility line that in three years we might be doing anyhow. That's our total exposure.
Okay. Lastly, what is the project plan as it relates to the minority female and disadvantaged businesses both with the demolition work, the construction work and the eventual permanent jobs and the contracting that goes with this project?
I'm sorry. What -- I was just handed a note, I apologize. I will 33 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 correct my earlier answer since I have just been provided with a fact. There are three city maintenance employers that do work out there.
Three city maintenance workers that periodically go out there the Civic Center but who would remain on City employment.
Oh, they will continue to be out there while we have the three other buildings in the near term. They are providing the security and making sure that the pipes don't break.
For Pennsylvania Hall, Convention Hall and the Museum Building.
So they are not losing employment as a result of this project?
I'm sorry, your question was -- 34 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
My question of you was: The project plan for demolition, construction, construction jobs, permanent jobs and supplier network for goods and services on this project as it relates to the use of minority, female and disadvantaged businesses, what is the project plan for this project?
The specific project plans have not been fully developed, and as I mentioned, would be part of the definitive agreement. I think both the University of Pennsylvania and Children's Hospital could comment on both their experience and what they perceive doing here, if you would like to at this point, if that would...
There will be definitive percentages both for -- and it will be the entire process. It will be professional services --
-- through 35 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 demolition, through construction.
It will be done -- it will be in the documents between PAID and the institutions. It will be reviewed by both City Council's technical staff, Ms. Hamilton, as well as the City.
At the current time, it would not be a plan that comes back here, per say, that is right. In a formal approval sense, that is right.
So we might find out about it; we might not find out about it?
You will find out about it. We will absolutely consult with Council.
Is there more detailed information available at this time?
Yeah. I think John Frye, the executive vice-president from the University of Pennsylvania will be prepared to comment. 36 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
I'm John Frye. I'm the executive vice-president of the University of Pennsylvania.
Sure. John Frye, executive vice-president of the University of Pennsylvania. Councilman Nutter, maybe by way of illustration I can talk to you about a project that we have under way right now at 36th Street and Walnut, which is the construction of a $90 million retail and hotel complex called Cents and Common, because it has been the benchmark that we have used to date to sort of establish where we are going to head to our voluntary NBE/WBE Programs. As I mentioned, it is a $90 million project. It represents the largest private commercial investment in the history of West Philadelphia. It is a volunteer program. 37 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 To date, 40 percent of the construction contract awards have been awarded to minority women, businesses, and 33 percent of the construction employment or about 50,000 hours, have been awarded to NBE/WBE firms. And, in addition, 137 West Philadelphians have been involved with this project to date in terms of employment. Again, it's voluntary. It is something we very much believe in not only for this project and the Civic Center Project, but all of the projects that we will be taking going forward from a construction standpoint. In thinking about the sort of components of this, there is a couple of different things: One I have mentioned, which is client commitment. The University, as the client of the various construction firms and developers will continue to insist on high levels of participation. And 40 percent on the construction, I think, is a pretty good benchmark. And as you can see, if you have been by the site, the project has gone beautifully. I 38 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 think it has gotten all sorts of wonderful opportunities for those firms. We have a very strong committee of representatives, a nine-person committee which includes our councilwoman, Mrs. Hamilton, from the city council president's office, several community representatives and several technical representatives. The University has also retained the Greater Philadelphia Urban Affairs Coalition to run the whole project. So we thought this through, we are very committed to it, and we will continue to push forward on the Civic Center Project as well.
And so you plan to utilize this particular model as your project plan, and that's what's --
-- going to be incorporated into the documents that Mr. Hankowsky made reference to?
All right. Thank you. 39 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
I should just point out, just emphasize the point, that Cents and Common, there is no agreement. I mean, Penn did this voluntarily. It is public support. They are just great people.
We really believe in this. It is a very important thing for us.
And there is a representative from Children's Hospital, too, who will be happy to comment.
Certainly. Why don't we just pull up another chair at the table, please?
Let me note that we have worked very, very closely with the University on their projects with regard to Women in the Minority Business Development in these past projects. So we have come a long way. And, in fact, with the work that SEPTA is doing, this also includes Councilman 40 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 Nutter's area from 46th to 63rd, they have called on Penn as a model for how to set it up and how you get it done. So we work closely, and it is working well. And their commitment is certainly to the area and to the minority and female participation. Thank you.
I just thought it was important to get whatever information we can get on the regard.
We've been down this road a couple of times in the past, so appreciate it. Thank you.
Good morning. It's my pleasure to address Council this morning. My name is Jeffrey Rives, and I am the executive vice president of the Children's Hospital of Philadelphia. With specific response, Councilman Nutter, to your question, I can give you a few benchmarks from the previous experience at the Children's Hospital of Philadelphia. 41 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 Most recently, the Children's Hospital completed a project in 1997 in West Philadelphia; it was our Cobbs Creek Primary Care Center. Approximately 100 percent of that work was NBE and WBE, and that was a project we are very proud of. And it has provided a vital service to the West Philadelphia Community. In addition, in 1995, we opened our Abramson Research Center on the campus at Children's Hospital. That project generated approximately $20 million in value of NBE/WBE construction and design activity. Certainly those would be our benchmarks moving forward with any project on this site.
Thank you. Thank you very much for that information. With regard to the first project, you know, if you can't do better than 100 percent, then, you know, I'm really not interested in what you have going forward.
Yeah. You've got 42 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 a ways to go. Thank you.
Thank you, Madam Chair. I have one question. Yes. Good morning, I have questions, too, about the minority and women's opportunities for contracting and employment. And I just want to say that I have the same sentiments that Councilwoman Blackwell and Nutter has. And I'm glad that Councilwoman Blackwell has been working so close with the two agencies. What I would like to know: How many of the permanent jobs are going to be full or part time.
I can give you a general answer with respect to Children's Hospital. For the facility we plan to construct for this site, we anticipate approximately 600 positions. I would say 80 percent plus would be full-time positions, approximately 20 percent would be part time. That's an approximation. 43 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
We are very early on in our planning process for the facility, but I would say that we're probably at about a 5 percent figure for minorities. 6
All right. 10 Thank you. 11 Thank you Madam Chair. 12
Thank you. 13 The Chair recognizes Councilman 14 Cohen. 15
This question will 16 go to each of the two gentleman who testified, 17 one for the University of Pennsylvania and the 18 other for the Children's Hospital. 19 With respect to minority construction 20 employment, I heard the representative from 21 University of Pennsylvania say that there were 40 22 percent minority employees. Do you have a 23 breakdown of what percentage at each job level? 24
I don't have that on my 25 person, but I could get that right away. We do. 44 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 We do try by those specific categories, yes. Absolutely.
We would like to have that. And the same question, and I will accept the same answer from the representative of Children's Hospital: If we would have a breakdown of what minority employment is at each construction level position?
And then one other one to both representatives: There was recently a comment in one of the newspapers, I think within the last week. I think it came from the state representative. And it was in connection with the baseball stadium issues. But it had relevance. There was a reference to the fact that at construction sites, the cars overwhelming carry New Jersey or Delaware tags rather than Pennsylvania tags. So I would appreciate information with respect to the residents of the job workers, the same group that I discussed before. Can that be furnished? 45 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
That certainly can be finished by Penn. I can just tell you on the Cents and Common Project that I referenced in my response to Councilman Nutter's question, we've had 575 Philadelphians work on that project, and 137 of those have been West Philadelphians. We are very mindful of the fact that we like to keep as much of the business in Philadelphia as possible. And we can furnish you with that information.
Good. I would be very happy to be able to join in the general congratulatory efforts, if it turns out that the equation of minority employees is fairly spaced throughout the level of the construction jobs. Thank you very much, Madam Chair.
You're welcome, Councilman. Are there any other questions for Members of the Committee? Do you have anyone else to testify on these bills?
The Planning 46 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 Commission, I believe.
I would like to say that I am on the board of the Cents and Common Committee. They meet pretty regularly, and we have really hand-walked and evolved into this process that works. So I certainly can make any data available for what has happened with regard to Cents and Common to date. We get regular reports. And I am on that committee, and I am glad to make that a part of any record, if my colleagues would so like.
Do you mind if Mr. Pizzi testifies first, because he has another commitment?
Good morning, Madam Chairwoman. My name is Charley Pizzi, I'm the President of the Greater Philadelphia Chamber of Commerce. 47 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 I will, just for the sake of brevity, give you a brief overview of my testimony. I believe members of council have had the testimony.
Madam chairwoman, Members of City Council, I am here to talk about the conveyance of the Civic Center Property to the University of Pennsylvania and Children's Hospital. Approximately 12 years ago I was commerce director when we had a similar situation with the PGW Site, which Bill Hankowsky has talked about how well that has worked to benefit the citizens of Philadelphia. The Chamber three years ago did a study on the health care industry not only in Philadelphia but the entire region. Here we have two major institutions, and it talked about consolidation of the health care industry and of 48 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 a loss of jobs. In this situation and with this conveyance, we actually have two institutions that are world renowned. And we will then benefit for their -- for their investment on this property because they have this global vision, which continues to help the City become an international player. And recognizing the number of jobs that can benefit, and the high paying jobs -- the entire neighborhood of West Philadelphia and the entire city -- the Chamber of Commerce is extremely excited about this transaction and what it can mean with regard to jobs as well as the breakthroughs in medicine and biotechnology that this could have for our region. So we are very much affirmative for this project and stand enthusiastically behind it.
Thank you very much. Any comments or questions from Members of the Committee? Thank you. 49 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
Good morning, Chairwoman, members of the committee. My name is Rich Lombardo from Philadelphia Planning Commission hear today to speak on behalf --
I am sorry. Richard Lombardo from the City Planning Commission here to speak today on behalf of both of these bills. In the interests of time, I will be very brief. The Planning Commission at its meeting of November 19th, 1998 recommended approval of the zoning bill, Bill No. 980784. And also they recommend approval of the property bill with one caveat, and the caveat being that at the time these proposed buildings reach their final design stage, they come back to the Planning Commission for review and comment. This is the similar way we handle the buildings on the PGH Site; it work very well. We didn't slow the process. Everybody, I think, benefited from the comments of our Commission on the design of those buildings, and we would make that same recommendation here. 50 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
Thank you. Any questions from Members of the Committee? The Chair recognizes Councilwoman Blackwell.
Madam Chair, I submit the report that can be made available to all Members of Council at some point. It is the most recent -- the October report for the Cents and Common Project. I understand that is too detailed to be made available now, but I submit it to the Chair so that it can be duplicated and passed out at some point.
Thank you, Madam Chair. I think I want to ask Mr. Hankowsky this question, so if he could come to the table, I would appreciate it. Mr. Hankowsky, has there been an analysis done of what impact this will have, this growth, this expansion on our existing medical 51 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 facilities. The climate -- you're in the area right now -- what studies or what research has been done to see what negative impact this will have on other health institutions in Philadelphia?
There has been no 8 sort of third party analysis. We haven't hired a firm to go out and analyze this. But let me make a point of what is happening here. Children's Hospital is proposing to develop research, medical office types of facilities. We are not adding hospital beds. We are not adding -- we are not building a bigger hospital in the way we normally think of hospitals in either of these projects. And I think both of these institutions are very mindful of the competitive nature of the industry today and really what they are doing, as Mr. Pizzi mentioned, is adding services, treatment facilities. Hence, focus will be on cancer research and treatment in areas that aren't happening in this region today. Penn is looking to establish basically a regional cancer treatment facility. 52 11/30/98 - WHOLE - BILLS NO. 980784 and 980785 And they are a designated national cancer center by the Federal Government. So these really kind of augment the kind of facilities we are talking about today, and they are not really, you know, as I said, expanding our hospitals per se.
Oh, they'll compete. I mean, obviously. But what we are doing is strengthening two of our premier institutions. As you know, Children's Hospital is always ranked as one of the top one or two children's hospital in the country. And this will continue there. University of Pennsylvania is always ranked, in many categories in national surveys, as one of the top medical institutions in the country. So they believe that to remain at that level -- and they get patients not only from this area but from around the world to these facilities. And to be able to do that, they need to be able to expand and have those types of facilities. 53 11/30/98 - WHOLE - BILLS NO. 980784 and 980785
Thank you. Are any other questions from Members of the Committee? Do you have anyone else to testify on these bills?
My name is Ken Sipos. I am with the Department of Public Property.
Excuse me. The noise level is rather high. Anybody having private conversations, I suggest you do that in the corridor so that we can hear the witnesses. Thank you.
Madam Chairwoman, and Members of Council, I am here today representing Public Property to testify in support of Bill No. 21 980784 and 980785. This bill will allow the cleanup of the site where the Civic Center is and it will allow the development of medical research, patient treatment, office and ancillary 54 11/30/98 - WHOLE - BILL NO. 980788 commercial space in addition to two aboveground garages, 2700-car capacity, and a 900-car below ground garage. The Department of Public Property supports this measure. I respectively ask that Council approve Bills No. 9780784 and 980785. I also ask Council that the rules be suspended so this ordinance may be passed upon second reading at council.
Thank you. Are there any questions from Members of the Committee? Thank you very much, sir.
Do we have anyone else to testify on these bills? Say none. We will now consider Bill No. 980788.
An ordinance amending Title 19 of the Philadelphia Code entitled "Finance, Taxes and Collections" by adding a new chapter, 19-3200, entitled "Keystone Opportunity Zone" to provide the contingent exemption, abatement or credit of certain taxes within a 55 11/30/98 - WHOLE - BILL NO. 980788 specified geographical area designated within this new chapter under certain terms and conditions.
Who is testifying on the bill for this administration? Mr. Mullin, please approach the table. Mr. Mullin, do you have testimony to be circulated.
Good morning, Mr. Mullin. Please identify yourself for the record and please proceed with your testimony.
Good morning. My name is Stephen Mullin. I am the director of commerce for the City of Philadelphia. And I would like to present testimony this morning. I also have some backup materials that we will be distributing to councilmembers here as I begin my testimony. I am also joined sort of in the audience today by members of my staff, members of the PIDC staff, Nancy Kammerdiner, the revenue commissioner, and members of the law department, 56 11/30/98 - WHOLE - BILL NO. 980788 and members of the City Planning Commission, all of whom have been party to the development of the Keystone Opportunity Zone Legislation and our application.
Yes, it is. I don't think we -- I know I have not received copies of testimony on any of the bills before us this morning. So whatever we're seeing, we're seeing for the first time today.
We have seen nothing. Why hadn't this been circulated prior to today's hearing, Mr. Mullin?
Pardon me? Has any of 57 11/30/98 - WHOLE - BILL NO. 980788 it? None. No, it has not.
Why would it not have not been circulated prior to this very moment?
We were working during the -- during the beginning and middle of last week. We had been request to look at some hundred additional parcels, which we went over and included and actually didn't even finish reviews of through the revenue department until Friday. So we have been actually working to finish up this, the actual parcels to be included.
There was, to my knowledge, one communication on this matter, I believe, a couple of weeks ago. There were, I think, a couple pieces of paper. One was a copy of the house bill that allowed for these and a couple other sheets of paper which have words on them but provide very little true information about this. I mean, I plan to be here for the duration, so it's -- time is not a problem. But I 58 11/30/98 - WHOLE - BILL NO. 980788 would at least like to establish for the record that it is a little difficult to deal with a project of this magnitude, receiving testimony and two packs of amendments on the day of the hearing.
So I don't know where this is going to end up. I don't know what the timing is on this project, but I think as we've seen in recent times as of last week, some people actually like to read the stuff that they get lest they end up passing things that they don't know what are in them. I would like not to fall in that category, Madam Chair.
Mr. Mullin, is there a deadline date on the passage of this bill?
We have to have this bill passed by the end of this council session, because it has to be included as an appendix to our application to the State for Keystone Opportunities Zones, which has a submission deadline of December 31st.
Well, when did 59 11/30/98 - WHOLE - BILL NO. 980788 this start Mr. Mullin?
How many Members of Council have you talked to about this since last spring?
Through briefings, I think the majority, but I can't say everybody.
Are you talking about the briefing down at the mayor's office or are you talking about personally including (unintelligible.) --
Did you share any information at these briefings, or did you talk about the concept?